Leading startups shed 25,500 jobs during the pandemic
As the pandemic ravages businesses, some of the world’s leading startups have been forced to make large-scale redundancies to stay afloat.
Since the start of the pandemic, approximately 25,500 jobs have been lost in the top ten largest startup layoffs, according to Buy Shares analysis.
Unlike their more established counterparts, startups do not have the luxury of large cash reserves so in a bid to save money they have been forced to cut their headcounts.
Unsurprisingly, leisure startups were the hardest hit last year as the pandemic essentially grounded all travel. Of the startups analysed by Buy Shares, the travel sector accounted for the highest cumulative layoff at 7,775 – 30.49 per cent.
Even with its bumper IPO at the end of last year, Airbnb was forced to cut 1,900 jobs, 25 per cent of its workforce, in a bid to mitigate the effect of the pandemic.
Overall Uber accounted for 29.5 per cent of all the highlighted job losses with 7,525 redundancies, followed by Booking.com with 4,375.
Despite a boom in e-commerce as consumers pivot online, marketplace Groupon, which sells experiences among other product, laid off 2,800 of its staff as people were forced to stay home.
“Some of the covered startups boast unique business models, but their funding sources dried up during the health crisis,” said Justinas Baltrusaitis. “In reaction, they radically reduced their staff to keep their long term projections on course.”
As uncertainty surrounding the pandemic, venture capital firms initially turned to their portfolio companies to shield them from the impact but funding subsequently dropped off.
Additionally given that many startups are yet to make a profit they have often been unable to tap into government support schemes.